A, B and C are partners in a firm sharing profits in the ratio 2:1:1. Their balance sheet as at 31st March 2020 was as follow: Liabilities Amount Assets Amount Creditors 50,000 Goodwill 30,000 Capital account -------- Land and building 80,000 A 80,000 Machinery 56,000 B 80,000 Car 54,000 C 60,000 Debtors 48,000 Cash 2,000 2,70,000 2,70,000 The firm was dissolved and assets realised: Goodwill Rs.20,000; Land and building Rs.1,00,000; Machinery Rs.50,000; Car Rs.28,000 and Debtors 50% of the book value. Realisation expenses were 2,000. Prepare Realisation Account, Capital Accounts of Partner and Cash Account to close the books of the firm.

A, B and C are partners in a firm sharing profits in the ratio 2:1:1.

1.	A, B and C are partners in a firm sharing profits in the ratio 2:1:1. Their balance sheet as at 31st March 2020 was as follow: Liabilities Amount Assets Amount Creditors 50,000 Goodwill 30,000 Capital account -------- Land and building 80,000 A 80,000 Machinery 56,000 B 80,000 Car 54,000 C 60,000 Debtors 48,000 Cash 2,000 2,70,000 2,70,000 The firm was dissolved and assets realised: Goodwill Rs.20,000; Land and building Rs.1,00,000; Machinery Rs.50,000; Car Rs.28,000 and Debtors 50% of the book value. Realisation expenses were 2,000. Prepare Realisation Account, Capital Accounts of Partner and Cash Account to close the books of the firm.
Answer» Answer Revaluation A/c Particulars (Dr.) Amount Particulars (Cr.) Amount To Building a/cTo PROFIT on revaluation A's capital a/c 16,500B's capital a/c 11,000C's capital a/c 5,500 3,00033,000 By Land a/cBy creditors a/c 30,0006,000 PARTNERS' Capital a/c Particulars (Dr.) A B C Particulars (Cr.) A B CTo A's capital a/cTo BALANCE c/d 1,56,500 71,000 25,00010,500 By balance b/dBy General reserve a/cBy Revaluation a/cBy C's capital a/c 1,00,00015,00016,50025,000 50,00010,00011,000 25,0005,0005,500 Balance Sheet of A, B & CLiabilities Amount Assets Amount CapitalA 1,56,500B 71,000C 10,500CreditorsBills Payable 2,38,00044,00020,000 LandBuildingPlantStockDebtorsBank 80,00047,0001,00,00040,00030,0005,000